NOTICE DATE: November 11, 2022
NOTICE TYPE: M-A111122-01 Operations
SHORT DESCRIPTION: Credit system issue related to the Effective Auction Clearing Price Used to Calculate the CRR Auction Credit Requirement
INTENDED AUDIENCE: CRR Account Holders and Counter-Parties
DAYS AFFECTED: November 11, 2021 – November 3, 2022
LONG DESCRIPTION: ERCOT has identified a software error in the Credit Monitoring and Management (CMM) system that determines the Effective Auction Clearing Price (EACP) used to calculate the Auction Credit Requirement (ACR) for the pre-auction screening process and in the auction clearing process for each Congestion Revenue Rights (CRR) auction.
Per Protocol section 18.104.22.168, Auction Process, in determining the ACR for each Counter-Party (CP), the lower of the Path-Specific DAM-Based Adder (Aci99), the EACP, or zero is used for each Point-to-Point (PTP) Obligation bid submitted by CRRAHs. EACP is calculated for each month of a CRR Obligation bid as a separate factor of the additional credit required for that product. The EACP is based on the most recent auction clearing price of an awarded Obligation CRR for a path, or the lowest auction clearing price if there is more than one awarded CRR, or zero if no awarded CRRs exist for the path. The error occurred for some CRRs where the end date of the CRR was interpreted to be the first day of the following month.
The credit required for PTP Obligation bids was impacted only in months where the EACP and the Aci99 were both less than zero. The corrected EACP may have altered the dominant factor in the “min(0, Aci99, ACP)” credit term.
The attached spreadsheet provides the population of impacted bids for each affected auction. In terms of impacted bids, the largest impact was 445 bids out of a total of 54,194 (0.82%) PTP Obligation bids.
The issue was introduced in a software release in September 2021, and the fix was implemented for the 2022.DEC.Monthly.Auction.
ERCOT plans to discuss this error at the November 14, 2022, Congestion Management Working Group (CMWG) meeting. ERCOT will also provide the correct ACP values at the CMWG meeting.
ADDITIONAL INFORMATION: ERCOT has implemented a fix for the error starting with the 2022.DEC.Monthly.Auction.
For details about how to calculate the credit requirement for PTP Obligation bids using the EACP and Aci99 factors, please refer to the CRR Credit FAQ located on the CRR webpage.
CONTACT: If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at [log in to unmask].
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